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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Boehner 11, Us 5, New York 5, Washington 5, Jed 5, Boeing 5, Michael Steele 5, Geico 4, Ho 4, Harry Reid 4, Newtown 4, Connecticut 4, Kudlow 3, Inouye 3, Bob 3, Angels 3, Europe 3, Nbc 2, Benghazi 2, China 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    December 17, 2012
    7:00 - 8:00pm EST  

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is washed out. this has been probably the 40th time people think apple's been washed out. you either want to invest in apple, or you want to be a trader in apple. the latter, hey. that's your ball game. it is certainly not mine. watch the transports. they've been key. i have been key on the transports to the point where if they can break out of this range, then you should be looking for things to buy in the strength, not sell. that's a different attitude than i've had. but there's some good things happen. there's always a bull market somewhere. i promise to try to find it for you right here on "mad money." i'm jim cramer. see you tomorrow! hey, larry, what do you have for us?
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connecticut, where the first of the victims from the tragedy here were laid to rest today. this grieving town begins the process of saying good-bye, investigators continue their search for how and why it all happened here. i'll have more coming up. devastation of superstorm sandy, but wait until you hear about all the pork loaded into this $60 billion sandy relief bill. hardly any of it gets to sandy and the actual survivors. we'll get to all that. "the kudlow report" begins right now. first up, 14 days and the clock is still running for a deal to prevent the nation's economy from falling off the tax and fiscal cliff. president obama, speaker boehner, they huddled at the white house today once again, but are we really any closer to
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a compromise? we go back to cnbc's eamon javers who joins us from washington with all the details. good evening. >> reporter: good evening, larry. you're right, they did meet today. it was a surprise meeting not announced as the previous meetings between the two men have been in past weeks. so we know that the meeting lasted about 45 minutes and that treasury secretary tim geithner also attended. what we don't know is whether the two men came to any deal or not or advanced the discussions in any way today. what we do know is that up here on capitol hill, senator harry reid, the democratic leader, suggested to his fellow senators that they might consider coming back on december 26th, the day after christmas, to finish up the fiscal cliff which suggests to you that they might be heading down the path toward a deal, although that is not set in stone. meanwhile, over at the white house, the press secretary, jay carney, was asked about where the president stands on the fiscal cliff. and he did his best to give as invasive an answer as possible and keep the negotiating wiggle room open. take a listen.
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>> the president believes that the parameters of a potential agreement are clear. it is also the case that we have not seen a proposal besides the president's that achieves the balance that the president insists be part of a deal. >> reporter: now, larry, the big test is going to come tomorrow when members of congress come back to town. they're going to have to decide whether or not on the republican side, in particular, they can live with a near $1 trillion in new revenue that speaker boehner has proposed in his latest public offering and on the democratic side, they'll have to come face to face with cuts in entitlements that the president might propose that they might not like as well. so the key for both men is going to be whether or not they can keep their respective caucuses in line starting tomorrow, they'll have an opportunity to go off the rails, if you will, when they come back to washington here, larry. >> eamon, i'm going to get to the merits and demerits of this proposal in a second. let me ask you, did i hear you or did i hear jay carney say
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december 26th? >> reporter: yeah, that's what harry reid said on the senate floor earlier today. he suggested to members that they should be prepared to come back to the senate, go home for christmas, but come back the very next day and be prepared to work on a fiscal cliff solution. that seems to be telegraphing that they might get the terms of a deal perhaps this week and then bring these members of congress back after christmas to finalize it and actually pass it with some votes. now, what harry reid said today isn't binding, so there's no guarantee, but he was at least telegraphing that as an option. >> we'll leave it there. many thanks, eamon javers. is the gop after a caving in and giving up its brand? or is the gop rising above partisanship and doing what the democrats apparently won't, and that's compromise? here now, cnbc contributor ari melber and michael steele, former rnc chairman. i want to go to my pal, michael steele, whom i haven't seen in so long. millionaire tax rates, issues
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about the debt ceiling. >> right. >> certainly not enough spending reductions. i talked to conservative republicans. there's a lot of back biting and talking and yelling and not happiness. is the republican party giving up its base? is it giving up the grass roots to make a deal? >> i don't think it is, larry, but i think it's also confronting the new reality post-election. the president clearly has more cards at his disposal to play. he's got the momentum of having the voters behind an idea that rates have to go up at least maybe to 37% or more for those who make $250,000 and above. so speaker boehner's been trying to carry the water for his base, recognizing that the bucket may have some holes in it. but also bringing the pressure to the president that says, look, you know, we're willing to go to that well if we have to on raising rates, but you've got to come to the table with spending cuts that are meaningful. and so i think what both of these gentlemen are looking for
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is the sweet spot. >> michael, hang on a second. okay. you may be right. boehner may be a hero here. i happen to respect the guy, and he may be the compromise guy rising above partisanship, but you know as well as i do, you're former rnc chairman. you know the base is going to say and is already saying, the base and the grass roots, okay, have to turn out in 2014, you said we wouldn't raise tax rates, mr. boehner. now why are you raising tax rates? >> yeah. that's his conundrum. and you know, the rhetoric from before is coming back to bite, there's no doubt about it. but the question is, if you're not going to get at the table and put that on the table, then what are you going to -- what is your offer to the president that's actually going to get the deal done before january -- before december 31st? >> ari melber, i think that president obama and the democrats are dr. no. all they do is say no. boehner keeps coming in and making concessions, particularly on revenues. they may blow up the whole
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republican party for all i know. and president obama just says no. and harry reid says no. and chuck schumer says no. we want more tax revenues. we will not cut entitlements. nancy pelosi said no entitlement cuts. you are the party of no. >> i don't feel like the party of no. i think a lot of democrats feel like the party of yes in the sense that the country gave a big yes to obama's plans. and to echo part of what chairman steele just said, elections do have consequences. i do think the republican base, however badly is wants a perfect plan, does understand there's time for movement. and to their credit, some republican leaders and conservative leaders have been saying to the base on two issues, on immigration and on at least part of the upper bracket taxes, they've got to move a little bit. not because it's perfect but because they lost and they want to work with this president. and as we all know, the rates go up either way. >> yeah, but i don't see one hint yet. i mean, boehner wants -- and i think boehner is right, i think it's sensible, if you're going
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to give in on tax rates, marginal tax rates, which i think hurts the economy, but whatever i think, you've got to get solid spending reduction including the budget sequester which is being ripped to pieces, entitlement reform, including social security and cost of living adjustments and medicare reform. ari, you know as i do, democratic leaders in both houses are bad-mouthing anything to do with entitlement reform. all they yap about is tax hikes. and that's one of the things slowing this thing down. >> we talk a lot on the show, larry, about growth. and the fact is that the relationship between the deficit and gdp is more important than a 30 or 40-year projection about an aging population. i do think, in disagreement partly with you and partly with the chairman, i do think the president has previously shown an openness towards domestic spending cuts, and the democrats went along with, as you say, sequester. so right there that is short-term domestic spending cuts. i don't think we have to do it on the backs of seniors, and i don't think that's what people voted for. >> michael steele, doing it on
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the backs of seniors, look, everybody believes correctly that in 20 years or so, we're going to go bankrupt. we know that. and in fact, we're already on a cash flow basis losing ground. >> that's right. >> the question i have, michael steele, is how far can mr. boehner go on this? how far can obama go? because the president has not commented, and his party is in revolt. yeah, they won, but they didn't win on cutting entitlements. they won by leaving entitlements alone. the democrats are in denial, michael steele. i'll give you the last word on how you get them out of denial. >> i agree with that, larry, and i think that's part of the reality for the president right now. what boehner is saying is look, we've been in this room before where we've agreed, you know, to tax increases on the off that we're going to get spending cuts. well, put the spending cuts on the table. let's put them out there together. we'll agree to a rate increase, 37%, 38%, you agree to a certain percentage of cuts entitlements, we'll go in together, we'll both have bloody nose and black eyes from our base, but more importantly, the american people will see we're serious and we're
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moving forward. and the president still has yet to do that. >> that's what i think. i think he's still dr. no, with all respect to my friend ari, i think so. anyway, thank you, gentlemen. we appreciate you coming back on. what the government does with our money, congress began debating a bill for superstorm sandy relief today, okay? but it's quickly being dubbed a super scam. because the more than $60 billion bill is stuffed with millions in spending for things like museums and amtrak and oh, yeah, salmon fishing in alaska. just what we need. so let's talk about this with wisconsin republican senator and budget committee member ron johnson. senator johnson, i just want to read off a couple to you. i just love this. $60 billion bill. $8 million for cars and furniture for the fbi. $150 million for salmon fishing, $57 million to clean up tsunami debris from 2011, $336 million for the amtrak program that's never been done. what is going on here?
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the people in new york who are still suffering need direct assistance. none of this is direct assistance. >> hello, larry. of course what's going on is business as usual here in washington. listen, i think there's bipartisan support to realize that this is emergency. we want to get money flowing to the people that need it. but let's get some information. let's not create a christmas tree here and load it up with all kinds of different ornaments. let's take a look at what the true need is, short term and then longer term. and let's do this in a measured fashion. so from my standpoint, i think it makes an awful lot of sense. we've got nine months left till fiscal year 2013. that's kind of the line of demarcation. we should be looking at what needs to be appropriated for the rest of fiscal year 2013. and then, you know, how about we pass a budget for fiscal year 2014 where we can consider the rest of the spending in a proper format where we're actually getting the information on how this thing really should be spent. >> i'm all for that, but i just want to say, look, the people in
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new york and new jersey, they still need help. >> absolutely. >> direct appropriation, financial assistance. and with all this stuff, did i mention $120 million in safe water drinking, $62 million for the weather forecasting and noaa, things like that. because of this flotsam and jetsam and pork in this bill, the bill is being delayed, and the people are not getting the money they need. that's what's infuriating. >> larry, there's already $5 billion left in fema's disaster fund. so that money should be flowing. we have money available through the flood insurance. that should be flowing. but you're right, listen, there are no republicans that i'm talking to that don't want to help the people that are in need now. we should be taking care of whatever is an emergency basis, get that money going. again, we do need to be careful. we are bankrupting this nation. and $60 billion is way too high a price tag to be considering on an emergency basis.
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i saw one cbo estimate, about $9 billion would actually be spent during this fiscal year. let's take a look at about a $9 billion package. whatever the real information is, let's get that information, let's get the money flowing to people that actually need it. i don't want to hold anything up, and i don't think any republican does either. >> the club for both and the heritage action log has come out very much against that. that's a call to arms to republicans. that's not good. that's going to stall things out some more. >> right. >> let me ask you about the final one. there's a $13 billion -- $13 billion item here for mitigation of future disasters. mitigation, i don't know what that means. that is not direct aid to the people who need it in new york and new jersey. $13 billion for mitigation. what in the heck does that mean? >> you presume that's actually spending to prevent damage in the future. but again, that's the type of spending that should be looked at in a budget process. in the light of day.
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and really offset against other things that would be lower priority. this is where congress really ought to be acting, prioritizing spending. and if that ends up being judged to be a high-priority item, we've got to find spending that's a lower priority item that won't be spent because we can't keep deficit spending the way we've been doing for the last four years. >> we'll leave it there. thank you, senator ron johnson of wisconsin. we appreciate it very much. back to the fiscal cliff. speaker boehner seems to be okay with a millionaire's tax. very interesting. the question is will taxing millionaires more really work? me, i say heck no. but we're going to have a debate right after this. don't forget, free market capitalism is the best path to prosperity. how about flat tax rates and strict budgetary limits? help those who need help and stop the boondoggles. i'm kudlow. we'll be right back. [ female announcer ] if you care for someone with mild to moderate alzheimer's,
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welcome back to "the kudlow report." so with house speaker john boehner proposing a millionaire's tax, many believe washington could be inching closer to a fiscal cliff deal. but what we may be inching closer to is a millionaire's tax that raises virtually no revenue and is anti-growth. what good is that going to do? i need to ask our cnbc
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contributor, jared bernstein, jim pethokoukis and they are both with me on set. jimmy, millionaires are smart. they're not going to pay these taxes. and furthermore, it's going to stifle economic growth at the margin. >> this is a policy intul jens by the obama administration. we have this huge output gap, we're going to be raising taxes, when we tried this in 1993 under bill clinton, it only raised about a third of the forecasted revenue. we're not going to get nearly the amount of revenue. i wonder if jared could tell me exactly how many job this is going to create and how much economic growth it's going to create. and could you round it off fo the nearest none. >> to the nearest zero. first of all, i agree with you guys on the revenue point. we've been talking about the top 2% of households above $250,000. this is the top .3% of households. at the same time, you can't make the argument that it's not going to raise any revenue and it's
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going to crash the economic. >> it could be. >> the cbo told us if we did the increase on the top 2%, it might lower the growth of gdp by .1%. >> we could not growth by that much in this whole quarter. >> if you think it's going to be a death nail for the recovery, you're way over the top. >> it's a step in the wrong direction. >> it's not growth i'm so sick of this. i just want a deal. >> i smell a deal. >> and i want middle class tax cuts to be extended. that's the only thing that's going to really matter. it goes completely counter to tax reform. the president wants $1.6 trillion or maybe $1.4 trillion in revenues over ten years. this stupid millionaire's tax, they're scoring it as $40 billion a year. they'll be lucky if they get $10
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billion a year out of it. what have you got up your sleeve, jared? i sense many more taxes are coming. >> i can tell you about the deal that i understand representative boehner brought to us. according to his score, $460 billion over ten years. you don't get that on the rates alone. we have to be talking about other taxes, things on unearned income, on capital gains, on dividends on estate -- >> more anti-growth. but even that is well below the president's measure. >> so is the deduction still in there? is capping the deduction still in there? that's the only way you get to the numbers. >> as usual, john boehner's been vague about this stuff. but it has to be because the rates don't get you near to the $460 billion that he said you'd get. >> if i make a million bucks a year, i'm screwed with my capped deductions and my marginal tax rate is going up from 35% to 40% and that's on the way to obama's 3.8% additional tax --
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>> you have to remember -- >> i'm either a small business or a successful individual like jimmy pethokoukis. you're going to be so damaged, he won't be able to build a new house or start a new factory -- >> let me just say. these are marginal tax rates. the dollar that you make over $1 million is what's taxed at the higher rate. let's not overdo that. that's the first point. the second point is that, again, we're talk about .3% of households and .5% -- not 5%, .5% of small businesses -- >> 20% of americans in the private sector work for a small business. they're going to get hit by this tax. you're going to say they're all hedge funds -- no. 20% of americans now work for hedge funds. these are the gazelles. >> i'll never understand that argument. small businesses deduct their
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expenses. they did great in the bill clinton years -- >> jared, profits are net income after all these expenses. that's what gets -- >> at 25% -- >> the next fiscal cliff is the debt ceiling. very important point. >> that's worse. >> it could be. will the debt ceiling be in this so-called deal, whatever this deal is? that's very important. >> that's sort of been the suggestion so far. certainly a year-long extension of the debt limit. but almost more than a tax rate, that will drive consumers crazy because that's going to be the leverage. that's a sticking point. >> over the weekend, big christmas party, hedge fund guy, old friend of mine, we talked about this. he's so sick of it. just give me a deal. >> most of the business folks will tell you that. >> whatever. what he worried about was the debt ceiling. the debt ceiling is a downgrade. the debt ceiling is a 1,000-point selloff in the stock market. that's the key. what do you hear? >> i don't believe that the
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administration is going to negotiate over the debt ceiling now or a year from now. i think that they are simply not going to let congress take that hostage and screw up the economy now or -- >> it is a rare pleasure, really, to have jared bernstein and jim pethokoukis both sitting on the set with me. two of the smartest guys and nicest guys. fiscal cliff aside, i am genuinely worried about one key part of the economy. i have striking numbers to show you up on the board. and we will be right back with that news.
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welcome back to "the kudlow report." here's my quick take on some of these manufacturing slump numbers that i don't like. housing is getting better. manufacturing is not. let's start out with today's release. the new york empire state manufacturing index, boom, boom, boom, here it is it may not be the end-all, be-all. but it is very important. this thing has been falling now -- this is the fifth straight monthly decline. that is not a good sign. there are problems in manufacturing. and we saw this in the industrial production index that came out friday. we weren't able to cover it then. i know it went up in november. but the trend for production has been flat to down now roughly the same six months that the new york fed's manufacturing index went down. and finally, business equipment, this is the production of business equipment in business and investment. and you can see how this thing is slumping as is the other hard goods.
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it can't work, folks. i know housing is better. consumers are okay for now. but in business investment and industrial production and manufacturing are falling, that is not going to be good. so, anyway, that's my quick take on the economy. now, let me move to an entirely different and tougher subject. the nation is still rightfully consumed with grief over the newtown school shootings next up on "kudlow," we'll continue our discussion of how best top prevent these unspeakable atrocities in the future. we don't have all the answers, but we'll try to get a good discussion for you. hmm, it says here that cheerios helps lower cholesterol
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welcome back to "the kudlow report." in this half hour, a new investigation blasts a government agency for huge pro-union favoritism. congressman darrell issa will join us later on. and stocks are having a fine year. we'll take a look at how it may continue. but first up, the questions and grieving continue in newtown, connecticut, tonight. police say it will be months
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before their investigation is finished. today, the first two victims from the massacre were laid to rest. nbc's jay gray joins us now from newtown, connecticut, with the latest. good evening, jay. >> reporter: good evening to you, larry. it seems like it just gets more difficult every day here in newtown. you talked about it. two of the young victims laid to rest today. 6-year-old first graders joined by their friends, classmates and families from this community, all struggling to get through this today. and when you stop and think they have to do this 18 more times for children and then the six adults, the teachers and the staff members who gave up their lives trying to protect the children inside that school, it's the beginning of what's going to be just a heart-wrenching process for this community. and again, just an emotional struggle. let's talk a little bit about the investigation today. we did learn that it's going to be months before they begin to assemble any answers in this case. in fact, they say that sandy
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hook elementary school will be locked down and a crime scene indefinitely. they plan to scour that school and continue to look for any evidence that may provide insight into why all of this happened. we also know that the gunman, adam lanza, actually shot his way into that school looking and talking with some people who know the family, he apparently had been at gun ranges in the area practicing his shooting with his mom who was a gun enthusiast, as we know. and part of that was apparently so she could teach him some responsibility. and a lot of people who knew the family said that he was very respectful of the weapons, showed no signs that anything like this could ever happen. but then what kind of signs could you show for something so incomprehensible as all of this? i have to tell you, i know you're going to talk next about what we need to do as we move forward, not only in this community but as a country. talking to the people here most affected, they say, yeah, we need to talk about new and
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stronger gun laws. and while there's a debate over whether now's the time or not, a lot of people -- i'd say the majority that i've talked to here say, if not now, then when? but they're also very quick to point out, larry, during this discussion, we need to talk about how we treat this nation's mentally ill and what we do to treat and protect them as well. >> thank you, jay. we are going to talk about those two very subjects, guns and mental illness. jay, just one detail. as you have reported, i believe, and as i've read, lanza got in, somehow he forced his way in. he wasn't buzzed in. he forced, he broke his way in. do we have any sense of how he did that? >> reporter: yeah. what we believe has had happened here and what law enforcement sources are telling us, larry, is that he used the semiautomatic rifle. he had to shoot out a window near the front door, a full-size window, one of the big pane windows, next to the front door
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of the school. and that's the way he gained access into the school and that noise is what prompted the school psychologist and the principal to run out of a meeting and face him in the hall. and that's when they unfortunately were gunned down. then he moved into a classroom there, a first grade classroom. >> many thanks, nbc's jay gray up in newtown. what can we do to make our schools safer and more secure? writing on this topic today and joining me is jed babin. we also welcome brian dougherty. welcome to both of you. brian, i want to start with you. i read nick gillespie's article today. did not a chance to read yours. i know there's evidence that some of the violence is coming down. but i want to ask you about an issue. the intersection of mental illness and guns, what we know, asperger's syndrome, autism,
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this guy, this kid was definitely mentally ill. he definitely had severe problems. his mother, by the same token, a survivalist, world is coming to an end, she may have contributed to all this. you're supposed to register state by state on any signs at all regarding mental illness as a disqualification for gun purchase and registration. but it doesn't happen, brian. why is that? >> one of the main reasons is that, of course, the thing that marks us as saying lanza was obviously an unhinged lunatic is the horrible crime that he committed. and for the most part -- first of all, you need to understand that the connection is not as tight as i think you're implying. hardly anyone adjudicated or thought mentally ill is ever going to harm anyone. in the case of loughner and with the aurora theater shooting, the reason we call them mentally ill is because of the crimes they
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committed. it's an example of the futility of gun laws of all sorts. people may think it's a great thing to keep people they think are mentally ill away from weapons. but in many case, we decide they're mentally ill after they've committed a crime. >> i don't know that i agree with that, jed. i think there are many ways to determine mental illness, clinical psychologists, various tests, records are kept. now, connecticut -- that analysis doesn't really work here because connecticut has pretty good registration. they would not sell him, the kid, the gun. it was sold to the mother. >> this happened anyway. >> and it happened anyway. i acknowledge that. but in a lot of these states -- there was a great editorial about it this morning. mental health records can be checked seems to me, part of this story has to go there, jed.
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>> i think that's only a very small part of the story. the real issue is we have gone since the 1960s or the 1970s way fo the left and protected the so-called civil rights of the mentally ill to a degree where it is now almost impossible to commit someone against their will. we need to have a much greater tightening of the laws. these people are identifiable. we don't to do political commitments like they do in russia. the but society has to be protected against the dangerously mentally ill. already profiles of these people. many studies show these people can be identified. when they are identified by schools, by police, by a variety of different things, they need to be put in a system where they can be -- we can be assured that they're going to be taken out of society and not -- >> a lot of the states don't do it. connecticut, by the way, does do it. and they wouldn't sell him the gun. but a lot of the states don't do it. >> it's not even a question of selling the gun.
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>> i have a lot to cover here. brian, i want to ask you this. i'm for the second amendment. i'm pro-hunter. i'm pro-handgun. i'm pro-rifle, i guess. but i want to ask you two questions. in our society today, why do we need extended clips, 30, 50, 100 shots at a time? why do we need semiautomatic guns in the hands of civilians? >> it's not a question whether we need them. it's a question that they exist. what you're asking is to wipe this thing that already exists off the face of the earth and it just can't happen. it's not true that a semiautomatic weapon is the only weapon that can be used on spree killings. the virginia tech killings, more violent than this used handguns. these clips, they exist in the world. the guy -- the aurora theater guy used one of these adjusted 100-unit clips and it jammed on him. these things exist. we need to wrap our heads around -- even in our grief, the fact that there isn't a legal
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solution to this problem. when we started with the mental background checks, even if this killer had been in that system, he was able to steal the guns anyway. you're asking to make them disappear. it can't happen. >> the 1994 gun control bill lapsed in 2004. it needs to be renewed. i think some of these things -- again, i regard myself as pro-second amendment and pro-gun. i do not regard myself as pro-100-shot clips. jed, last shot here. there's a third issue. that's the security of the schools. this is a very difficult issue, security of the schools. in short, jed, how much can we do there to avoid having this hideous atrocity again? >> we can do a lot. what we need to do is give the teachers the training and the assets, the school administrators, to buy enough time, to protect the kids in the window of 2 to 20 minutes to allow the cops to get there. you do that through a lot of different things, including ballistic-proof doors and locks
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on all of the classrooms and on the schools. you can give them different means of protecting the kids, even within the classroom called a ballistic blanket. you can paint it pink and put bears on it and it will still look like something that the kids will be comfortable under but they'll be protected from gunfire. you can give some of the schoolteachers, train them and some of the prince palace, train them and give them things like tasers, non-lethal force. you can use those means to lock down the school and protect the kids in time, enough time -- >> i love that taser. i read that taser thing in your article. i feel a lot more comfortable with that. that's a terrific idea. i'm sorry we've run out of time. maybe we'll revisit this. jed, thank you very much. brian, i appreciate it. from my heart, these baby angels, may they rest in peace. these baby angels and the teachers and the administrators who gave their lives to protect the baby angels. and of course, the parents and the whole town of newtown. my wife and i have a place next door in redding, connecticut.
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our mass was full on sunday yesterday in worship and in praise and may god rest and look over these poor children. i call them baby angels. i'm kudlow. we'll be up next. [ male announcer ] this december, remember --
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so is president obama's labor relations board biased on behalf of big labor and their union bosses? that's the consensus of the new congressional report. joining us now is house oversight chairman, republican darrell issa of california. chairman issa, as always, welcome, sir. the headline story here is that the nlrb is bias in favor of unions and their bosses. that's not a shocking headline. but i just wanted to hear some of your key points. what's your most important point in your investigation? >> i think one of the most important discoveries was that there were inappropriate rule violations, what they call ex parte discussions that went on where you actually have the political appointees and the consul who's prosecuting the case against boeing essentially having outside the public eye
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and ear communication. you also have e-mails that make it very clear that consuls, if you will, in some cases, non-political appointees, plus political appointees, are very biased in their view of what should happen, rooting for the labor and rooting against boeing. this discovery is what we think is a good example of what happens when you make recess appointments that do not go through confirmation, that are not, in fact, up to the task of heading an independent agency. >> tell me about these e-mails that break the firewall that's supposed to exist between the board members and you're not -- they're supposed to act as judges and you're not supposed to e-mail one another. one of these e-mails said, hooray for the red, white and blue, talking about the machinist union in the boeing battle. what did they do wrong that might be prosecutable at some point? >> this is one of the challenges, that these rules are
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not codified in laws, although they came pretty close to violating every tenet of being an independent agency and particularly the one where, as you said, these five individuals are, in fact, the jury and the plaintiff is, in fact, a prosecutor paid for by the same agency who's supposed to make the case. at the same time, boeing is supposed to have a fair and impartial opportunity to make their case. remember, for your viewers, boeing didn't lay off one union worker. just the opposite. they hired union workers in everett, washington, to expand their 787 line. then they also hired workers in south carolina at a facility they already owned that had voted out a union, previously been covered by the machinist union. but they added jobs there. and this was considered to be retaliation rather than good business sense to have two locations making the dreamliner. >> i had two quick questions on this. i'm so interested in this board
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and their judges. apparently one of the deputy consuls or something e-mails one of the members or somebody and said that she was worried that they might have made the machinist union angry or mad. that's absolutely incredible. that's in the reporting here, which i guess proves your point. but that's just total bias. >> obviously, if you're so concerned that you don't even want the union leadership to be "angry" at you, that shows you're trying to play favorites for the union. remember, this was a suit that as soon as the union settled a new contract with boeing, they made this go away when, in fact, if it was wrong conduct -- misconduct on behalf of boeing, it should have continued. but in fact, this was used as a technique to get the machinist union a new contract that they liked. again, clearly something that was not the intention of this supposed independent agency that is supposed to arbitrate the difference between, if you will, union and non-union.
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>> and just being a recess appointment -- i want to ask you about this. a recess appointment for a board member, i think -- >> for three of them. >> the union of operating engineers, this was the general consul for the union of operating engineers. according to reports, this union was mobbed up, full of criminal convictions. what's a guy like that doing on the national labor relations board? it was mobbed up. >> well, larry, that's the example of somebody that probably wouldn't have gotten through a bipartisan senate confirmation. and one of the challenges is if the courts overturn this as, quote, not a valid recess appointment, which is in doubt, then everything they've done for the last year would be thrown out. but not all the influence they had for the last year, not all the settlement that went forward out of fear. so the effects of the president's recess appointment will happen even if his appointments are ultimately overturned. >> one real quick one. was there any effort by the nlrb
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to interfere with the michigan right to work election allowing workers to decide their own paycheck? any interference by the nlrb for an election that went against unions? >> at this point, we don't see any. but what we do see is this board has been biased in favor of, if you want to union yize they're r you, if not, they're on the other side. and that's part of president obama's -- he doesn't apologize for it -- his pro-union agenda. but it's one of the reasons these right to work states continue to be voted. in fact, an open shop state is a state that's more attractive to business investment. >> sure, absolutely. chairman darrell issa, we preer appreciate your work on this particular investigation. thanks for coming back on the show. >> anytime. switching gears now, portions of the accountability report on benghazi will be released to the public on wednesday, a day ahead of hearings on the raid that took
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the lives of ambassador chris stevens and three other americans. secretary of state clinton was given the report today but she won't testify thursday because she's recovering from a concussion. instead her deputies will do so. i sincerely hope we all finally get to the bottom of this benghazi business which continues to fester. also, senator daniel inouye of hawaii passed away this afternoon at age 88. inouye was a senator for 50 years. he was a world war ii hero as well. inouye was awarded the medal of honor for actions he took in italy in 1945 as a member of the legendary 442 combat team composed entirely of japanese americans. may senator inouye rest in peace. now back to some stock market work. stocks continue to discount a fiscal cliff solution of some kind. as i've suggested, they're reacting positively. how about a little optimism on that story? up next, some optimism.
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gasoline prices have fallen to lows for the year. just shy of the national average, $3.25 per gallon, that according to aaa. and the oil price information service says it, too. the average price now at its lowest since december 28th, 2011. some analysts believe it could go lower. gas prices typically decline at year's end and it's all something positive for the economy.
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the dow jumped 100 points on budgetary optimism. i don't think the rally's over. let's talk to jim lacamp. it's going to be a lousy deal but it's going to be a deal that avoids a recession. and what interests me here is the stock market's been flagging this for a while and we are having a good year. can i just read you something? you probably know this. but year to date, the s&p is up 14%. the nasdaq is up almost 16%. we are having a very good stock market year. >> we are. and i think the rally can continue for a while, probably for a few weeks once a deal is announced. i agree with you. it's not going to be a good deal. it's not going to cut the deficit and it's not going to promote growth. so i don't know that the rally will last throughout the entire year but i think we'll get a bit of a rally before realize that nothing is being done to help the economy. the market is also rallying on
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hopes of global economic growth, on q.e. and the yields that have come way down in corporate bonds that have also pushed money into the stock market. and then you've got some performance chasing. so we are ging to have some issues next year because global growth is not what everybody thinks it is. things are not getting better in europe. they're calm but they're not getting better -- >> i don't know that they're not getting better. i don't know that. a lot of risk spreads look very good in europe. the ecb, the central bank there, is pumping in a lot of liquidity. in fact, you have, for better or worse in the long run -- all i know is in the short run -- the fed is pumping more liquidity in. the european central bank is pumping more liquidity in. the bank of japan is bonkers. and that's why their stock market -- they're pumping in liquidity. so is china. now, in the long run, we may come to regret this very much. in the short run, i have a feeling all this liquidity is a bigger issue than the fiscal
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cliff for stocks. >> for stocks. i totally agree with you. we're printing money all around the world. it's good for the stock market. but we're pumping liquidity in, lower growth forecast from the ex, just about any acronym entity that you think of, we've seen lower growth forecast at the same time the credit spreads have come back down. yes, i think things are calmer. these are good things for equities. the yields on corporate bonds, you have to go out seven, eight years to get money on junk paper. corporations have more cash on their balance sheet. they're buying back shares. >> ting the financial picture -- there's nobody that's cutting marginal tax rates. nobody's deregulating and there's nobody that's limiting government. i get that. there's no supply side policies going on.
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but when you look hat the financial fear spreads or the financial risk spreads -- and here's one, banks. i saw dick bove on our network earlier today, bullish on banks. banks up 28% year to date. i think that's a positive la leading indicator. i'm not looking for gangbusters economy. i'm a little bit optimistic about the stock market continuing. i'll give you the last five seconds. >> they've calmed the stressors in the system. it's good for stocks. but that's not getting better growth has not materialized. >> that's it for this evening's show. we will be back tomorrow evening with some more controversial issues. i don't know, folks. we're going to get through this. [ male announcer ] how can power consumption in china,
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